Alternative Governance and Service Delivery Model for … · Ad Hoc Musl

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CANADIAN URBAN INSTITUTE 100 Lombard St., Suite 400 e;:; Toronto, ON M5C 1M3 [,;:, tel: 416-365-0816 N b' rb !}O:' we site: canu .com Alternative Governance and Service Delivery Model for Muskoka SUB.MIJT.5 0: Ad Hoc Musl<olta Committee 25, 2000 PREPARED BY: Gardner Church J. Nevin McDiarmid Glenn R. Miller

Transcript of Alternative Governance and Service Delivery Model for … · Ad Hoc Musl

CANADIAN URBAN INSTITUTE 100 Lombard St., Suite 400

e;:; Toronto, ON M5C 1M3 [,;:, tel: 416-365-0816

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Alternative Governance and Service Delivery

Model for Muskoka

SUB.MIJT.5 0: Ad Hoc Musl<olta Restru~fng Committee

~ruary 25, 2000

PREPARED BY: Gardner Church

J. Nevin McDiarmid Glenn R. Miller

ALTERNATIVE GOVERNANCE AND SERVICE DELIVERY MODEL FOR MUSKOKA

Table of Contents

1. INTRODUCTION AND BACKGROUND 1

1.1 Rationale For Study

1.2 Role of the Ad Hoc Muskoka Restructuring Committee 2

1.3 The Public Process 2

1.4 Next Steps 3

2. BASIS FOR THE EVALUATION 3

2.1 Local Governance Options 3

2.2 Evaluation Criteria 7

2.3 Public Comment To Date 11

3. FINDINGS OF THE REVIEW 13

3.1 The Financial AnalysiS 13

3.1.1 General Financial Information 13 3.1.2 Analysis of the Tax Shifts Which Result From the Three Proposed Options 14 3.1.3 Potential Savings From One Municipality 18 3.1.4 Tax Increase Mitigation Policies 19 3.1.5 Start Up Costs 20 3.1.6. Other Financial Issues 22 3.2 The Communities Of Interest 23

3.3 Evaluation 27

4. SUMMARY OF CONCLUSIONS 29

4.1 Evaluation of the two most viable options 29

4.2 Comparison of the Two Most Feasible Options 32

4.3 Transition issues 32

4.4 Conclusion 33

MAPS 34

APPENDIX 1. Terms Of Reference 35

APPENDIX 2. List of individuals and organizations that submitted comments 36

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1. INTRODUCTION AND BACKGROUND The seven municipal councils that comprise the District of Muskol<a are currently reviewing their system of local government in order to determine if there are other institutional arrangements which better meet the needs of the community, To do this, by resolution of their respective municipal councils, the Area Mayors and the District Chair formed the Ad Hoc Muskol<a Restructuring Committee, The Committee is charged with the responsibility of examining the available options to the present system and to recommend a new system,

Following a request for proposals, the Committee retained the Canadian Urban Institute to review the system of local government in Muskoka and prepare a report to assist the Committee with its deliberations, This report presents the substance of our findings with respect to the evaluation of four options against the criteria developed by the Ad Hoc Muskol<a Restructuring Committee, These findings were presented in summary form at a public meeting held in Port Severn on February 17, 2000, The final section of this report summarizes our assessment of the two most feasible options, These are Option Two (a single municipality of Muskoka) and Option Three (two municipalities. divided on a north/south basis), This report is intended to be used as the basis for deliberations by the Ad Hoc Muskoka Restructuring Committee and subsequent deliberations by the Area Municipal and District Councils,

1.1 Rationale For Study

The motivation to do the review stems from recent actions by the provincial government, which has made local govemment reform a priority policy issue,

Early in its first term, the Province undertook a ''Who Does What" review that resulted in the transfer of many new powers to local government in exchange for the Province taking over a larger share of education costs. To mal<e this transfer of resources and powers "revenue neutral" local governments were required to make substantial savings, This challenged local governments across Ontario to find new ways to effectively manage the new functions and focused attention on potential efficiencies that could be achieved by reducing the number of small municipalities, The result during the past five years has been the most aggressive reform of local government since the late 1960s and early 1970s when the District of Muskol<a was formed,

The first major amalgamation initiative took place under the auspices of the 1997 omnibus Bill 26, This resulted in a net reduction of 300 municipalities, which included amalgamations in Toronto, Kingston and Chatham-Kent, where the two-tier systems were eliminated in favour of Single-tier governments,

The second initiative was in 1999, when the government reviewed four regional systems. Within 60 days of their appOintment, special advisors for Ottawa-Carleton, Sudbury, Hamilton-Wentworth and Haldimand-Norfolk recommended the replacement of two-tier with single-tier systems, In all but one case the recommendation was for a single muniCipality to replace the entire local government system, In Haldimand-Norfolk, the

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bodies (such as a joint police commission). The government accepted most aspects of all four reports and immediately introduced legislation to implement them for January 1 2000. As a result of this speedy implementation, the newly created municipalities will be in place in time for the November 2000 municipal elections.

A second group of municipalities - the District of Muskoka, the County of Oxford and the Regions of Niagara and Waterloo - were subsequently encouraged to propose reforms. Muskoka and Niagara chose to carry out their own system reviews to pre-empt any unilateral action by the Province. It does not seem likely at this point that decisions made by either the Ad Hoc Muskoka Restructuring Committee or the Province could result in any form of restructuring being implemented in time for the upcoming municipal elections.

A key element in Muskoka's decision to tal<e the initiative regarding restructuring is that previous review processes undertaken in the early 1990s involving all seven councils and the 51 elected representatives did not result in changes to the system of local governance in the District.

1.2 Role of the Ad Hoc Muskoka Restructuring Committee The Ad Hoc Muskoka Restructuring Committee was struci< last fall. Public meetings were held and agreement was quickly reached that any evaluation process should be facilitated by consultants and that the process should provide for as much public input as possible. In the context of setting a realistic budget for the process, the Committee agreed to limit the number of options to be considered. The Committee also resolved to assess the options against the five provincial criteria and four additional criteria worked out by the Committee.

1.3 The Public Process

Following the decision to retain the Canadian Urban Institute, the Committee aclmowledged five key issues with respect to process:

(a) Any disputes over external boundaries would be dealt with later as a separate process.

(b) Any decisions regarding the merits of various options should acknowledge and take into account that there are transition costs associated with any decision to restructure.

(cl To maximize the public's awareness and ensure that information is communicated as broadly as possible, a decision was made to establish a website containing all relevant information.

(d) The public should be given an opportunity to comment following receipt of the consultant's evaluation of the options.

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(e) No communications should be made with Queens Park regarding restructuring until District and Area Municipal Councils have had a full opportunity to review and debate the options open to the community.

1.4 Next Steps The substance of this report was presented to the Ad Hoc Muskoka Restructuring Committee at a public meeting on February 17. 2000. Following presentations by the public, the Committee debated the findings of the consultant and set a timetable for additional public consultation.

2. BASIS FOR THE EVALUATION This section of the report discusses the scope of the four options agreed on by the Ad Hoc Muskoka Restructuring Committee and the criteria against which the options are to be evaluated.

2.1 Local Governance Options

In its deliberations regarding the range and type of options to be evaluated, the Ad Hoc Muskoka Restructuring Committee concluded that it would be pointless, and create needless expense, to examine options which have no chance of adoption by the Province. To serve as a benchmark, and to reflect the strong views of some residents regarding benefits of the present system, the Committee decided to also examine the Status Quo.

Accordingly, all options except the Status Quo are for one tier of local government.

Option 1 • The Status Quo Currently Muskoka is governed by sil( local municipalities and a District municipality that embraces the entire District. The functions of local government under The Municipal Act are shared between these levels. The District is responsible for the costly items that tend to be larger in operating scale· such as water treatment, waste disposal, social services, major roads, police services, land ambulance services and District-wide environmental and land use planning policies. The local municipalities are responsible for activities such as tax collection, libraries, recreation, fire service, local planning and zoning. (See Table 1)

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TABLE 1: SCHEMATIC OF CURRENT ROLES, RESPONSIBILITIES AND FUNCTIONS IN MUSKOKA DISTRICT

SERVICE District Area Partner- Cost Contract Voluntary Comments ship Reeov. out

Pollution control and • • Monitors water quality. by-law water and pollution enforcement control fund Urban Service Area • USA By-laws adopted by By-laws District Council must conform

with District and Area Official Plans

Electric Utilities • • Hydros currently carrying out corporatization with potential to amalgamate. Non urban areas served bv Ontario Hvdro

Domestic garbage • • • Contracted to private sector. All collection & recyciing commercial and industrial also

contracted to orivate sector Landfill operations and • • Siudoe disposal Planning policy • • District has delegated approval

of local plans. subdivision & condominiums. Areas have statutory duties administering Property Standards. Hotel Fire & Safety under Ontario Building Code

Development • • Principally a local function. approvals Recreational water • District operates recreational quality monitoring water quality model. program Implemented through District

Official Plan and Area Zoning BY-laws

Flood Plain • MNR sets water levels. management Planning restrictions

administered by Area Municipalities

Forest Management • District Good Forestry Practices By-law

Built heritage • • LACAC active in Huntsville

Natural heritage • Natural Heritage Area Proorams and Policies

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SERVICE District Area Partner- Cost Contract Voluntary Comments ship Reeov. out

Walking trails + + + Maintained by public works. Some volunteer activity. Others contracted out

Road system + + + Construction & maintenance contracted out

Locks operation + + + + Contracted to Area Municipality Some owned & operated by Area Municipalities on a partial cost recovery basis, others no charge. District owns Port Carlino locks

Muskol,a Airport + + Partial cost recovery

Economic + + + Varies from area to area. Some developmenl local committees.

Huntsville/Lake of Bays joint chamber of commerce. Muskoka Tourism Marketing Aoencv is District-wide

Community + Key tool relying on Section 28 Improvement Plans of the Municipal Act

Police + + fFe;for service by OPP

Ambulance RFP completed and single contract for services commencing Jan.1, 2001. Police Advisory & Emergency Services Committee

Fire + + + + District appoints District Fire Coondinator. Municipalities have mutual aid policy. Huntsville provides service to MNR in lieu of taxes. Dispatch donelocallv

911/emergency + + District-wide 911 system, contracts with Bell and OPP. Area Municipalities assign civic addresses with technical assistance from District

Parks & swimming + + + + Shared use agreement with pools schools.

Libraries, Cemetenes, + + + Partial cost recovery. Local Community centres & Cultural facilities

advisory committees

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SERVICE District Area Partner- Cost Contract Voluntary shin Recov. out

Ontario Works Delivery • H •

Homes for the Aged • • District ownership and governance; Management contracted to Extendicare

Public Health • • Muslmka - Parry Sound Health Unit reviewed in 1999

Provincial offences ! • • • Clerks, Treasurers, II • • Leoalservices Tax assessment • • Tax bills are issued locally

Option 2 • A single Municipality of Muskoka (See Map 1) This model, which is similar to the options selected in Ottawa, Hamilton and Sudbury, would see all seven existing municipalities dissolved. They would be replaced by a new municipality that would carry out all the functions of local government. For the purposes of evaluation, the current boundaries are unchanged.

Option 3 • Two municipalities· Northern Muskoka and Southern Muskoka (See Map 2)

This model reflects some of the characteristics of the option recently selected for Haldimand·Norfolk. It would see all seven existing municipalities dissolved and replaced by two single tier municipalities. One would cover the northern part of Muskoka and be centred on Huntsville. The other would cover southern Musl<ol<a and be centred on Bracebridge and Gravenhurst. For the purposes of the evaluation, District and Area Municipal Staff proposed a dividing line between North and South. If this option is carried forward, the precise dividing line can be refined through consultation with municipal councillors, public comments, local and district planning professionals and examining available geographic and community of interest data. The Ad Hoc Muskol<a Restructuring Committee would then define the potential municipalities.

Option 4· Two municipalities· Eastern Muskoka and Western Muskoka (See Map 3)

As a result of a proposal put forward at a community meeting on January 12, 2000, the Ad Hoc Muskol<a Restructuring Committee agreed that for the purposes of evaluation, the dividing line between an eastern and western Muskoka should be represented by the existing boundary with Georgian Bay.

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This option reflects the importance placed on creating a municipality that directly addresses the needs of coastal communities.

2.2 Evaluation Criteria In the four restructurings undertaken last year, the Province relied on five criteria for local government reform. The Ad Hoc Muskoka Restructuring Committee has assumed that these criteria must be taken into account:

1. Fewer municipal politicians while maintaining accessible, effective, accountable representation, taking into consideration population and community identity.

1C0mmen~ At the present time, the population of Muskoka is served by 51 politicians (44 councillors, 6 mayors and one District Chair). Sixteen of these councillors also serve on District Council with the six mayors plus a chair elected by the District Council. The level of representation within each municipality ranges from 2,500 per person to 4,000. There is no magic number on levels of representation in Ontario; North Bay is approximately 5,000 per councillor, while Toronto (after the re-adjustment planned for this fall) is about 57,000 per councillor (more than the permanent population of the District). Reducing the number of politicians across the District would be feasible under both the status quo option (by redrawing ward boundaries or adjusting the roles and responsibilities between District and local representation) as well as in any of the restructuring options.

For the purposes of evaluation we have used the following: • Status quo: 51 politicians (44 councillors, six mayors with one District chair). • Single municipality: 13 politicians (12 councillors and one mayor). • For both two municipality options: 16 politicians (7 and 9). • We also undertook an extensive evaluation of ·communities of interest" in

order to identify how various parts of Muskol<a relate to their community.

2. Lower taltes by reducing overall municipal spending, delivering high quality services at the lowest possible cost, preserving volunteerism, and promoting job creation, investment and economic growth.

1C0mmenij For the most part, services that can be delivered District-wide are already being delivered in this way. The majority of any savings resulting from restructuring would most likely be limited to the reduction of staff. A more realistic way to view this criterion is to assess whether individual options are likely to position the municipality or municipalities to minimize future increases. All of the options except the status quo are for a single tier. For options three and four, a relevant concern is whether any two single tier entities would have the necessary critical mass to maintain service levels without increased costs, since certain services will also need to be maintained at the local level.

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Our review suggests that the level of volunteerism is already extremely strong. Volunteerism tends to reflect the age and income structure of a community as well as opportunities to serve. To sustain the latter condition, it is important to maintain an appropriate municipal framework so that volunteers are not required to shoulder too heavy a burden.

Issues of job creation, investment and economic growth depend to a significant extent on the face presented by a community to the outside world in terms of the business climate. Any municipal structure selected must be able to meet public's expectations in this regard.

3. Better, more efficient service delivery while maintaining taxpayer accessibility.

1C0mmen~ Although we have not had the benefit of surveying public attitudes to the quality of municipal service levels, none of the public submissions to the Ad Hoc Muskoka Restructuring Committee cite significant problems or raise issues that could not be addressed through reorganization or restructuring of the existing bureaucracies. Our review of materials provided by both the District and Area Municipalities suggests that service levels in Musl(oka are professionally administered and probably comparable to other two-tier jurisdictions. It would also appear that those municipal services that benefit from economies of scale are already being delivered or administered at the District level. The recent introduction of a District-wide solid waste management service, contracted to the private sector, is a good example of the ability of Muskoi<a politicians and staff to cooperate on larger issues. The key issue with respect to this criterion, therefore, is whether options under consideration would negatively affect the quality and cost of service delivery.

To reflect the practical benefits associated with physical access to government offices we have split our evaluation into 3 (a) and (b) in order to assess "accessibility" separately.

4: Less bureaucracy by simplifying and streamlining government, reducing duplication and overlap, and reducing barriers and red tape for business.

1C0mmen~ Moving to a single tier system would likely result in a smaller bureaucracy by redistributing lines of responsibility and reallocating specific functions, although certain services also have to be delivered or continue to be accessible locally. A single tier system over the entire area would probably result in a smaller bureaucracy than two single tier systems, In some respects, moving to two single tier municipalities would result in a loss of efficiency with respect to the services presently being delivered District-wide and require the establishment of one or more service boards to manage issues such as watershed management, policing.

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5. Clear lines of responsibility and better accountability at the local level by reducing duplication and overlap.

iCommen~ With the help of District and Area municipal staff, we reviewed current roles, responsibilities and functions. When two-tier systems were initiated. the role of upper tiers was typically to establish comprehensive levels of service (such as water and pollution control systems) while the function of lower tiers was to develop detailed local plans and services. Upper tier governments also tooi< on many of the financial challenges related to establishing costly infrastructure. while Area Municipalities tended to deal with high profile local issues such as zoning. Over the past 30 years, much has been achieved and the disparities that once existed with respect to resources. personnel and the sophistication of systems have disappeared or been significantly reducad. The following functions and services are carried out (or managed) at the District level: • the sanitary sewer system and pollution control o waterworks o solid waste management. garbage and recycling o district planning • forestry management • major roads • pOlice and ambulance • welfare anfsocial housing o delivery of provincial programs • public health o issuance of debentures • tourism marl<eting through the Muskoka Tourism Marketing Agency.

Some of the areas that are the domain of the Area Municipalities include: o septic systems • electric utilities o local planning and flood plain management o local roads o community improvement plans o fire service o pants, libraries. community and cultural services o tax bills.

The following services involve both District and Area Municipalities: o storm drainage • planning related functions o fish habitat o

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wharves and docks economic development land sales and acquisitions

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o 911 and civic addressing o administration including permits, by-law enforcement and information

collection.

While on the basis of our review it is difficult to say if there is duplication of services, there is clearly some overlap on issues of mutual concern that is rooted in the inherent division of powers between upper and lower tiers or Provincial legislation governing the two tier system of government. Even in a cooperative environment, resources will inevitably be spent in dealing with intermunicipal issues.

Under the "status quo," it would clearly be possible to reduce some of this overlap by undertaking an organizational review, but this could probably not match the potential of improvements made possible by moving to a single tier system, regardless of whether this is applied to one or two municipalities. This is because overlapping functions in a two tier system require continuous calibration between upper and lower tier, which takes time and resources.

The criteria added by the Ad Hoc Muskoka Restructuring Committee were as follows:

1. Any new systern of government should fairly represent all ratepayers.

1C0mmen~ This criterion takes into account one of the criticisms of the present system regarding the disparities in ward size and the resulting potential for imbalance in terms of rural vs. urban priorities. Any new governance model needs to be able to respond to the needs of different constituencies in a fair way. Some of these factors include: • creating a municipal structure that allows for a logical distribution of wards

within the municipality. • reasonable certainty that differences between the rural and urban

perspectives will be dealt with appropriately • confidence that areas of Muskoka with environmental pressures will be given

the same level of consideration as plans to expand the economy • equitable distribution of financial risk in terms of providing balanced service

levels to permanent and seasonal residents.

2. The public must have an opportunity to understand any proposed change before it is adopted.

1C0mmen~ This reflects the short time frame for the evaluation process and the inherent difficulties of communicating with a population distributed over a large geographic area. We interpret this criterion to mean that the options put before the public by the Ad Hoc Muskoka Restructuring Committee must be intelligible and easily understood.

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3. Any new system of local government must facilitate management of llIluskoka's watersheds including all impacts upon them.

ICommenij This recognizes that Muskoka's economy is heavily dependent on tourism and maintaining the attractiveness of the environment. Future restructuring decisions must therefore not undermine the ability to monitor and manage the cumulative impacts of development on Muskoka's lakes and rivers.

Approximately 80 percent of the District is within the watershed of the Muskoka River, a remarkably close fll between municipal and natural area boundaries. The strength of this connection has allowed District staff over a 20 year period to develop an effective water quality model and policies on development capacity within the Musl<ol<a watershed. Given the critical importance to Musl<oka's economic future of maintaining the quality and attractiveness of its natural resources, the ability to keep track of the cumulative impact of development in the watershed as a whole is I<ey. In addition, because the headwaters of the Muskol<a River are located in adjacent municipalities or on Crown land, it is important to be able to represent the interests of Muslcoka in a cohesive way when negotiating with municipalities north and east of Muskoka. For these reasons, we consider this to be an important criterion.

4. Any changes to llIluskoka's external boundaries will be considered as a second stage after completion of this study.

1C0mmenij This acknowledges that since the formation of the District some 30 years ago, there continue to be concems related to the inclusion of certain areas within the District as well as concerns related to the exclusion of other areas that might logically be considered part of Muskolca.

The status quo and single municipality options retain the flexibility to undertake detailed study and carry out negotiations with respect to future boundary changes. Options Three and Four, which propose to cut the District into two single tier municipalities, place increased importance on the boundary changes issue. Any two entities must be viable in their own right because there is no mandate to negotiate external boundary changes at this time. A northern municipality would also have some flexibility to adjust boundaries.

2.3 Public Comment To Date

This section summarizes the main points made by organizations and members of the public regarding options for restructuring.

Option 1 The Status Quo There were relatively few comments from the public that support maintaining the current system. Those that do stress the need to reduce overlap between the two

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tiers of governrnent. The status quo received sorne support through a public forum conducted by the Corporation of the Township of Lake Of Bays. The principal concerns expressed focused on preserving community identity, and the successful translation of an "urban model of amalgamation" to a rural community. In contrast, a number of submissions in support of other options commented negatively on the status quo. The Bracebridge Ratepayers Association, for example, does not believe maintaining the status quo satisfies the provincial criteria or those devised by the Ad Hoc Muskoka Restructuring Committee.

Option 2 A Single Tier Government (The Municipality of Musko/ca) The Bracebridge Ratepayers Association and other individuals believe that a single tier local government best satisfies all of the criteria and recommended a proposed Electoral Map of Voting Units. The Muskoka Liaison Committee representing numerous ratepayer groups noted the importance of achieving equal representation, appropriate management of the watershed and efficient government. In addition, residents of the Township of Lake of Bays identified waste management, environment, and watershed issues to be dealt with at a "District-wide" government level. A number of submissions indicated opposition to a single municipality because its size would undermine community identity. Another submission stressed the negative impact on municipal employees and politicians in terms of time and costs wasted on travel to a single office.

Option 3 Two Municipalities - Northern Muskoka and Southern Muskoka A number of submissions that supported creating two single tier municipalities were focused on protecting the identity of existing towns such as Gravenhurst or Huntsville. Equally, the sentiments of those in support of the north-south division were opposed to consolidating the perceived role of Bracebridge as the dominant centre. Submissions in supporting the North/South split focused on the benefits of easy access to local politicians familiar with their needs and the different priorities of the North and South parts of Muskolca. It was also noted that seniors have less capacity to travel long distances and would be disadvantaged by a single municipality. A similar point was made with respect to volunteerism in the community.

Option 4 Two Municipalities - Eastern Muskoka and Western Mus/coka The Georgian Bay Association suggested dividing the District into a Georgian Bay Coastal Municipality and the remaining areas of Muskoka into a single MuniCipality. (This comment led to a decision by the Ad Hoc Muskoka Restructuring Committee to use this suggested division as the basis for the East/West restructuring option.) Those opposed to this option were principally concerned that this alternative would potentially compromise the management of the entire watershed. The Georgian Bay Littoral Biosphere Reserve is not in favour of this option because Ontario's "Living Legacy Strategy" regarding Great Lakes Coastal planning and management becomes separated into Coastal and Inland communities.

A full list of people and organizations making deputations can be found in Appendil( 2.

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3. FINDiNGS OF THE REVIEW This section summarizes our findings with respect to the financial analysis, the communities of interest and the evaluations of each option by the nine criteria. Conclusions concerning evaluation criteria.

3.1 The Financial Analysis The terms of reference for the study call for:

(a) A financial analysis of the impact of tax shifts for three proposed options; one municipality. two municipalities split north/south and two municipalities split east/west.

(b) A proposal on how tax shifts any inequitable that might arise from the proposed options might be mitigated.

(c)

(d)

An analysis of possible savings from each of the restructuring options.

An estimate of start up costs for the new municipalities.

3.1.1 General Financiallnfonnation

The following table shows the population, taxable assessment and local government tax rate for each of the Area Municipalities in the District of Muslwi<a.

TABLE 2:

District of Muskoka ,-.". - ,~ .

Analvsis of Area MuniciDaltties Municipality Population ':Taxable'Assessment .'. -Residential Basic Tax

. ($ OOO's) ..... . Rate

Bracebridae 23945 1 040512 0.0080882 Gravenhurst 25.013 1000013 0.0078320 Huntsville 26836 1261778 0.0087891 Georgian Bay 20629 770010 0.0069272 Lake of Bays 17226 826748 0.0071395 Muskoka Lakes 35,789 2.243.467 0.0061695 Total 149438 7142526 ....

The analysis shows that Musi<ol<a Lakes has the largest population and taxable assessment although it has no large urban centre.

Basic residential tax rates are shown because all of the District of Muslwi<a uses the same assessment base. so local tax rates reflect the respective tax costs in each municipality. The basic rate, without sewer and water rates, is shown here because it is more comparable. Sewer and water services are only provided in the urban areas. To include them in these tax rates would mean that the tax rates are not comparable.

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There is a considerable variance in basic tax rates. The Huntsville basic rate (the highest) is some 30 % higher than Muskoka Lakes (the lowest). As taxes are pooled when municipalities are amalgamated this means that, unless the new municipality takes steps to prevent the shift, there will be considerable tax shifting between taxpayers as a result of the amalgamation.

3.1.2 Analysis of the TaJe Shifts Which Result From the Three Proposed Options

Option 1. The Status Quo As there are no boundary changes or pooling of taxes there will be no shifts under the status quo.

Option 2. Single Municipality of Muskoka If there is only one municipality there will be considerable tax shifting as a result of the tax pooling.

For this calculation the total costs of all the municipalities in the District were used to calculate one new tax rate for the whole municipality. The District sewer and water rates were added to the urban municipalities only, to put the change in taxes in some context. If the sewer and water rates are not included in the base then the percentage tax changes can be misleading.

District solid waste rates were not included in the rates as they are an area rate Z '\ in some municipalities. /

The table also shows the expected change in taxes as a dollar change per $100,000 of assessment.

A second set of results shows what will happen if the predicted savings from amalgamation materialize.

The third calculation has been entitled legislative change. The reason for using ) this title is that the new municipality should seek legislative authority to allow them to stop the shift to the rural municipalities by having the urban ratepayers pay a higher share of taxes in the urban municipalities. .

Rural taxpayers resent having to pay the same tax rate as urban ratepayers for a ) level of service that they deem to be lower or for a service they do not receive. If the rural taxpayers are to support any changes a municipal structure they will have to be assured that they will only pay for the level of service they receive.

In the case where a taxpayer does not receive a service, such as those on private roads, they may not have to pay road tax rates. Where the level of service is deemed to be lower, such as ratepayers being serviced by volunteer fire departments the tax rate may be lower than those receiving fire protection frOm) full time fire departments. Only when the level of service are deemed to be the same will the rural ratepayer have the same tax rate for that service as the urban ratepayer. .I

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It will be up to the staff of the new municipality to review the municipal operation to determine where inequities in service levels exist and to adjust the tax rates accordingly.

In this case the amount shifted in the legislative change calculation is $1 million which is the amount we expect that the new administration can reasonably expect to transfer using area rates in the new municipality.

The tax rates shown ar~tes. There are also calculations for other tax rates, industrial, comri'ierCia; farm etc. The detailed analysis shows that tax rates for other classes of assessment are different but the percentage change in taxes is still the same.

TABLE 3:

.Dis1rictofMuskoka Analvsis ofTax Shifts

-One'Municipaljty .-. Shift Before Shift After Legislative Shift Adiustments Savinos

% Change Tax % · ',TaJc' .. ,-- ... % Change Tax Chanoe' Chanoe. · .:Chanoe'·: Chanoe'

Municipality

Bracebridae -7.6% -$79.50 -13.2% -$147.03 -9.3% -$120.98 Gravenhurst -6.4% -$53.88 -11.2% -$121.41 -7.2% -$95.372 Huntsville -13.1% -$149.83 -18.8% · -$217.36 -14.2% -$189.32 Georgian Bay 14.5% $36.65' ,r;4."4'10 -$30.98" r-tf.8% -$4.54 Lake of Bays I 1.4% $15.47 I -7.2% -$-52.06 ,a -3.4% -$26.02 Muskoka Lal<es ... \. 17.3% $112.31/ \ 7.2% 44.84../ " 5.2% $18.80

'Per $100,000 in assessment /

) The table shows a shift in taxes from the urban municipalities to the rural areas. This is to be expected. The urban areaueceive more municipal sen/ices and pay ? hjgh~xes. Later in the report we will discuss how some of these tax shifts might be offset.

Option 3. North/South Split This analysis shows the shifts in taxes that would occur if there was the north/south split in municipalities explained in Option 3.

Again the tax shifts were calculated by developing new uniform tax rates for the new municipalities. The results of the analysis mirror the ones in the other options. The tax shift into Musl<ol<a Lakes is lower than in Option 2 because it is no longer in the same municipality as Huntsville. In the northem municipality the higher Huntsville taxes will result in a considerable tax shift to Lake of Bays ratepayers.

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Of interest is the tax impact on the ratepa ers in the sections of municipalities split between two municipalities. Ra aj@rs in ~skoka Lakes being annexed to the north will see taxes go up 2.5%. Tho~~ remaining in the southem municipality will have their taxes g up only 4.5%.1 These kinds of inequities will have to be addressed.

TABLE 4:

District of Muskolta .-Analysis of Tax Shifts

Two MunicioalitiesSoIit Nol1h/South .' .

Shift Before Shift After Legislative Adiustments Savinos Shift

Municipality % .. Jax,C".:·" ;-';,,".~i'~;~ ~"';r .' " .% Tax ,~.,;:., South 'Chanoe' .Chanoa" . '.::,Chanae 'f ''; e·;:" '-Challge Change Bracebridge -12.1% -$134.76 -13.0% -$191.73 -11.1% -$172.24 Gravenhurst -10.0% -$109.14 -10.4% -$166.10 -9.1% -$146.80 Georaian Bav -2.7% -$18.61 -4.0% -$75.58 -7.0% -$56.18 Huntsville (portion) -17.2% -$205.09 -19.1% -$262.05 -16.4% -$242.65 Muskoka Lakes 9.2% $57.11 7.7% $34.32 4.5% 18.63

'Per $100,000 of assessment

TABLE 5:

District of Muskoka . ~ ..

AnalYsis ofT ax Shifts Two Municioalities Split NorlhlSouth

Municipality % Tax % Tax % Tax North Change Change' Change Change' Change Change' Huntsville -5.4% -$65.37 -8.7% -$125.82 -7.1% -$106.52

Lake of Bays 14.0% $99.93 8.6% $39.48 5.9% $20.38 Muskol<a Lakes 31.9% $196.83 25.7% $136.39 22.5% $120.09 (portion)

Bracebridge 0.5% $4.96 -3.0% -$55.50 -1.0 -$36.20 (portion) , Per $100,000 In assessment

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Option 4. cast/West Split This table shows the results of the calculations of anticipated tax shifts if Georgian Bay was separated from the rest of the District.

TABLE 6:

'District of Muskolta Analysis ofT ax Shifts

Two Municipalities Soli! EastIWest .. Municipality Shift Before Shift After Savings Legislative East Adjustments Shift

% Tax'. " %. "'Tax ' , % Tax 'Change<

.. .:Change~' I ':Change ChangeO Change. 'Change::

Bracebrtdge -6.9% -$76.51 -12.0% -$144.31 -11.1% -$123.31 Gravenhurst -4.6% -$50.88 -10.0% -$118.69 -9.0% -$97.69 Huntsville -12.4% -$146.83 -17.0% -$214.64 -16.3% -$153.64 Lake of Bays 2.6% $18.47 -6.9% -$49.34 -9.8% -$28.34 Muskoka Lakes 18.7% $115.37 7.7% $47.56 4.3% $26.56

Analvsis ofT ax Shifts Two Municioalities Solit EastlWest

Municipality % Tax " % . , ·Talc % . Tax West Change Change' Change Change' Change Change'

Georgian Bay 0.0 0.0 0.0 0.0 0.0 0.0

°Per $100,000 of assessment

The results are similar to the one municipality Option 2. The difference is that Georgian Bay does not change. It is assumed that Georgian Bay will continue to buy services such as police, social services and health unit services from the District at the same rates as they charge the Area Municipalities. Any change in those fomnulas will affect the taxes in Georgian Bay.

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3.1.3 Potential Savings From One Municipality

This table shows the calculation of potential savings from amalgamation. There is some disagreement between the Area Treasurers and the District staff about the magnitude of possible savings. Both arguments have validity. We have shown both calculations and use them to determine a range of potential savings from amalgamation.

TABLE 7:

District of Muskol<a Analvsis of Possible Savinos From Amalaamation

Cateaorv Area Municioalities .

• District Municioalilv ...

Staff Reduction 27 staff@ 42 staff@ $ 50 000 each $1350000 $50 000 each $2100000

Council Expenses 51 politicians "

reduced to 13 $350000 same $350000 Purchase of Economies of scale and Goods and reduction in duplication $2,800,000 same $2,800,000 Services Total "$4,500;000 . .. ' .. .

:$5,250,000 .-.. ,,-. , .. ,

.. .

Total estimate annual savings of betweE\.~liOn to $5.25 ~ion can be expected from the amalgamation of the District mumeipal/Ulitruieills"--___ -

It should be noted that these savings are not immediately available but will be made over a period of time as the new municipality implements its new organization.

Staff Reductions: There are currently 403 full time employees in the District and the Area

~MuniciPalities. The District staff ar:e..of-the-opinior:l-that-these-can-ber~duc§.d-j.Q% w!Jich is in line with their experience from amalgamatiDQ-the-Sewer-and-water fu[)clions. The staff of the Area Municipalities do not agree. They feel that their operations are already lean and savings of this magnitude are not possible. They

(

'have suggested a smaller number of staff positions being eliminated. The savings from these positions have been estimated at $50,000 per position partially because they include some senior staff and also because there has to be an amount to cover the costs of fringe benefits.

Council reductions: There are currently 51 politicians in Musl(oi<a. Of these 22 are also on District Council. The new municipality is budgeted to have 12 councillors plus a mayor. The new councillors are budgeted to get higher compensation and will probably need more support staff. This will reduce anticipated savings.

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(Pur.ci:laseo-gooos-amJ-sel¥ices are expecteC\i to \ e:?onor;r!!es of scale and eliminatic:m of duplicati9n-! '-'~-

Possible cost savings two municipality options

A. North/South Split

be reduced 5% due to

The north/south split will mean that the $1.5 million spent on administration salaries will not be available for savings. There will be some savings from combining the Huntsville and Lake of Bays administration. As a result we anticipate that the north/south split will reduce the amount of potential savings by about $ 1 million.

8. Eastlllllest Split If the easUwest split is the option chosen it will have an effect on the potential savings from amalgamation. The Georgian Bay budget anticipates about $500,000 being spent on council and administration. This amount will not be available for savings in the new municipality. If so the potential savings for the easUwest option will be reduced by about this amount.

3.1.4 Tax Increase Mitigation Policies

The analysis of tax shifts show that there will be a substantial tax shift as the result of amalgamation unless the municipality takes steps to prevent it. There are several strategies available to achieve this goal. These are:

A. Savings from municipal consolidation Any savings made from municipal consolidation will be available to reduce anticipated tax increases.

From our calculations we have concluded that a $1 million dollar saving results in about a $14 saving per $100,000 in assessment.

B. Levels of service The staff of the new municipality will have to analyze the service levels of the current municipalities to see what changes in service levels are necessary to make them uniform across the District. Savings from changes in~lce I~ could be used to offset tax shifts.

C. User Charges The municipalities already have several services, such as sewer and water, on standardized rates across the whole District. Staff wiJlrh~e to analyze other '( service charges to ensure they are also uniform. !hisQ:!1.'!}0result in increased c

revenues that can be used to offset expected tax shifts.

D. Area rates The District and Area Municipalities already use area rates to pay for servic~ provided to only some ratepayers. An analysis of the urban area costs(: 7' reveal some other costs that are urban in nature that should not be paid for y the rural ratepayers. The development of area rates by service will be an

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ALTERNA rIVE GOVERNANCE AND SERVICE DELIVERY MODEL FOR MUSKOI<A

n important part of having the new municipality being accepted by the rural \ ratepayers.

Reserve and reserve fund policies Municipal accounting shows transfers to reserves and reserve funds as expenditures although they are really a method of reserving revenues for future use. An analysis of the present reserve and reserve fund policies will disclose whether some of the current tax rate differences result from differences in reserve and reserve fund policies.

Assessment Growth Revenue generated by growth in assessment, to the extent that it is not needed to provide new services, can be used to offset some of the anticipated tax increases.

Tal( Phase In Programs If a new municipality is created it will have the authority to phase in tax increases over a number of years. This means that the property owners getting increases will not see their taxes increase as uicldy and ~!2§Y~\I\Iould have r ceived ax r io w' w . 10 gEl!' for the decreas.e..§.. to befearized: There are formulas that can limit tax increase to a percentage of the base (say 3%) that can be easily implemented. The new municipality should seriously consider such phase in programs if tax shifts are considered to be too onerous.

3.1.5 Start Up Costs

(

There will be one time start up costs associated with the restructured municipality (or municipalities). HistOrically the Province has he ~d fund these expenditures. If the District should opt for restructuring it should~eque t assistance as a condition of the proposed change.

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Start up costs have been estimated as follows:

TABLES:

CATEGORY COST 1. Office and Facility Consolidation: $ 500,000

Closing yards, upgrading District office.

2. Consolidation moving expenses: $100,000 Moving parts of operations into new buildings.

3. Labour adjustments: $1,500,000 Severance, retraining and counselling. 30 at $50,000. Early retirement may reduce this total.

4. Integration of IT systems: $500,000 Uniformitv in software brinaina new offices on line.

5. Integration of Communication Systems. $50,000 Standardized telephone systems and centralized information systems.

6. Communications to the Public: $100,000 Information about the new municipal structure; Ward structure, services, etc.

7. Planning: $500,000 Consolidation of planning function; Bringing all the planning into one, new by-laws etc.

8. Municipal By-law consolidation: $150,000 3 people one year.

9. Legal and audit: $100,000 Reviewing new by-laws and financial systems.

10. Signage, stationery: $250,000 Municipal buildings, trucks, road signs etc.

11. Special Election: If required.

12. Special studies: If required.

TOTAL $3.500000

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These amounts have been estimated only on an approximate basis. Before any request for funding is made to the Province these estimates will have to be examined in more detail and the final amounts substantiated.

3.1.6. Other Financial Issues

Some other financial issues arose during our study that should be considered as part of any proposed municipal restructuring:

(a) Reserves, reserve funds, surpluses and deficits: An effort should be made to return these amounts to the ratepayers that were responsible for their creation.

(b) Municipal Hydro: Huntsville, Gravenhurst and Bracebridge recently took over ownership of their hydro systems. These are valuable assets. How the proceeds from these assets should be distributed in the event of restructuring will have to be considered.

(c) Baysville Sewer and Water: We have been informed that there is a new sewer and water capital project planned for the Baysville area in Lake of Bays. Sewer and water projects are financed from developers' levies, water and sewer rates and general taxation. If the proposed north/south option is chosen much of the anticipated developer's charges revenue from the District will not be available to finance this project. Nor will the revenues from the Bracebridge and Gravenhurst water and sewer systems. This matter will have to be considered if the north/south option is to be implemented.

(d) Police Costs: In our calculation of tax shifts, for the north/south option, we have not made any provision for shifts in police costs. There is evidence that the Huntsville OPP detachment makes up some 40% of the police costs. The proposed northern municipality has only 30% of the assessment. For purposes of this analysis we have assumed no shift in police costs. This may not be the case in the event of the separation of the municipalities.

(c) Increase in costs. There is a belief that if the District becomes one municipality and has one tax rate there will be a demand from the rural areas for increased levels of service to reflect the increase taxes. Area rates by service will go a long way toward resolving this problem. If people in a certain area want an increased level of service, they will have to pay for it.

(e) Phase in time: Any restructuring will be complicated. Any change should allow sufficient time for implementation.

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3.2 The Communities Of Interest

District and Area Municipal staff provided us with a broad variety of information that details "communities of interest," based on both "formal" service or catchment areas (influenced by the distribution of muniCipal services) and "informal" definitions (influenced almost exclusively by the market place). The communities of interest that proved most useful to the analysis were:

High school catchment areas (See Map 5) Detailed busing routes could not be obtained but general data was supplied for most school boards. Generally speaking, the Catholic school boards have larger catchment areas than their Public School counterparts. St Dominic, for example, serves almost the entire District of Musl<oka, with the exception of the southern parts of the Township of Georgian Bay and Gravenhurst. Its reach also extends north of Muskoka.

In the Township of Georgian Bay, high school students from Honey Harbour are bused to Midland, while residents of Mactier are sent to Parry Sound (Public) and Bracebridge (Catholic).

Library service areas (See Map 6) Libraries are also a very important component in the social fabric of communities and benefit extensively from the work of local volunteers. At present, each municipality maintains its own library board. A review of catchment areas for Gravenhurst, for example, indicates that although the clientele is primarily from the Gravenhurst area, patrons come from as far away as Port Carling, Bala and Bracebridge. The Huntsville library provides service for residents of Muskoka Lakes, Lalce Of Bays and as far as Katrine (located north of Muskoka on Highway 11). At the other extreme, Lake of Bays supports two small libraries, both located in community centres, in Dwight and Baysville. Both facilities serve distinct catchment areas, illustrating the very localized nature of the service.

The Bracebridge library system appears to have the most community impact, serving clients in all sections of the District. Although the core of patronage is clearly in Bracebridge, there are significant pockets of usage in Gravenhurst, Port Carling, Utterson, Port Sydney, Baysville and as far north as Hunt !)!i1l~Lhe system also serves people in Honey Harbour, Footes Bay and osseau (~ Muslcoka Lakes), and Dwight and Dorset (Lalce of Bays).

The apparent broad reach of library service may well be linked to the role of Gravenhurst, Bracebridge and Huntsville as employment centres.

Cemeteries Although cemeteries are a local area responsibility and often associated with localized community interests, more than half of burials in two Gravenhurst cemeteries serve other communities (Bracebridge and Simcoe County). Cemeteries maintained by Huntsville have burials from as far north as Bunc's Falls.

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Fire service Fire service is another local service that relies heavily on volunteers. Although there is a District-wide 911 emergency call system, each Fire Department has its own system of dispatch.

Parks facilities Many of the activities supported by community facilities such as arenas and community centres attract users from a very large area, often beyond the boundaries of Muskoka. For competitive hockey clubs, for example, toumaments attract users from across Ontario and even Quebec. Local minor hockey usage is more localized and choices are often made on the basis of coaching available as much as physical facilities. The number of hockey players from Lake of Bays, for example, is split between Huntsville and Bracebridge. Huntsville also attracts parks and recreational patronage from residents of southem Parry Sound as far as north as BUrk's Falls. For services such as swimming, the facilities provided by Bracebridge and Huntsville are well utilized by predominantly rural communities. Residents of Muskol(a Lakes, for example, tend to utilize the Bracebridge swimming facilities.

The communities of Georgian Bay are relatively self contained, and focused on Honey Harbour and Mactier.

Health facilities The communities of Georgian Bay are serviced by Midland and Barrie hospitals to the south and by Parry Sound to the north. The balance of the District is served by three hospitals. The northem part of Muskoka Lakes, Huntsville and the northem part of Lake of Bays is served by Huntsville District Hospital. South Muskoka Memorial in Bracebridge serves Georgian Bay east of Highway 69, the rest of Muskoka Lakes, Bracebridge, Gravenhurst and the south part of Lake of Bays. Gravenhurst is served by South Muskoka Memorial Hospital and Orillia Soldiers Memorial.

Retail trade areas (See Map 7) A key determinant in identifying community of interest is where people shop. According to retail surveys undertaken for private sector companies in the recent past, the two principal retail hubs in the District are Bracebridge and Huntsville with a smaller retail focus in Gravenhurst. A large proportion of the District's population is centred in Musl(oka Lal<es and in these three urban areas. In addition, Bracebridge and Huntsville attract extensive business related to seasonal tourism. The trade areas of the towns overlap and also extend beyond the District boundaries. In the case of Bracebridge, the trade area extends northwest to Lake Joseph, and south and east into Simcoe and Haliburton counties. The trade area for Huntsville stretches outside the immediate area of the town, with customers coming from Bracebridge, Port Carling, Bala, Sevem Bridge and north as far as Sundridge on Highway 11. Huntsville is also the principal retail destination for people living in the communities that comprise Lake of Bays.

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Communities in the Georgian Bay area are oriented to Midland and south to Orillia, and relative to the rest of Muskoka, are quite self contained. Residents of Musl(Ql<a Lakes Township divide their dollars between Huntsville, Bracebridge, Gravenhurst and Parry Sound.

The trade area data for Muskoka indicates that there is no single dominant community of interest with respect to retailing; at the same time, because economic decisions made by individuals rarely respect municipal boundaries, any and all jurisdictional arrangements will inevitably overlap into adjacent jurisdictions.

Newspaper and other media coverage (See Map 8) Locally based newspapers (such as the Gravenhurst Banner) cover a similar catchment area to the retail trade areas for each town but real estate advertising is typically District-wide indicating for all practical purposes that there is a single real estate marl<et in Muskoka. A review of major real estate brokers confirmed that the real estate marl<et extends beyond Muskoka although "Muskoka" is a principal identifier for "cottage country." There is considerable overlap in the grocery field, with the Orillia Packet also being sold in Gravenhurst. Several publications are District-wide, such as the Muskoka Times (virtual), Bracebridge Examiner, the Advance, Weekender, Musl<oka Today and Muskol<a Sun. The Huntsville Forester's catchment area includes Huntsville, south to Bracebridge, west to include Muskoka Lakes and north of the District to communities along Highway 11. The Georgian Bay Gazette is sold only in the Township of Georgian Bay.

Chambers of Commerce (See Map 9) Although the largest chambers of commerce in Muskoka are centred in Huntsville, Bracebridge and Gravenhurst, membership is spread quite broadly and not necessarily limited to the nearest centre. "Huntsville/Lake of Bays" is a joint chamber but a number of businesses located in the southern part of the area are members of the Bracebridge chamber. Huntsville also attracts members from north of the District boundary. Membership in the Gravenhurst chamber, although largely centred in Gravenhurst attracts membership from as far south as Orillia and north as far as Huntsville. The Township of Muskol<a Lakes has two chambers in Bala and Port Carling. There is also a Chamber of Commerce in Port Sydney.

Catchment areas for environmental groups (See Map 10) Generally speal(ing, where the interests of a group are generic (for example, the Musl<ol(a Field Naturalists), the catchment area is broad. In the case of the MFN, this is almost District-wide. Their Huntsville counterparts are based from Huntsville and Lake of Bays north into Parry Sound. The Muskoka Heritage Foundation's area of interest is all of the District with the exception of the Township of Georgian Bay. The interests of the Georgian Bay Heritage Foundation are primarily based along the shoreline of Georgian Bay.

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Radio service, cable, Internet and telephone calling areas (See Map 11) Muskol<a Cable provides service in a corridor centred on Highway 11 from Severn Bridge to Springdale Park (north of Bracebridge). Several other cable providers serve Huntsville and smaller concentrations of population.

A review of telephone calling areas reveals an historical patchwork of mismatched names and service areas whereby a cell from one community to the next is long distance (say, Morrison township to Bracebridge) but a call to a place much further away is not (for example, Morrison Township to Barrie). In the Township of Muskoka Lakes, residents in severel locetions cannot call the municipal offices toll free. There are also confusing discrepancies between areas covered by white page telephone books and the yellow pages.

There are a number of Internet service providers available in Muskoka. One of the more popular domain names is Muskol<a.com. The company that owns this name was among the first to be established in the area and the owners claim that it is domain name of choice for commercial because of its broad availability (all of Musl<oka except Georgian Bay) and the readily identifiable name - Muskol<a.com. The key to Internet usage is availability of an Internet provider that can be accessed within a local calling area. The future of Internet service in Muskoka is largely dependent on what happens as a result of competition in local telephone service and the growth potential of linkages with cable companies.

Radio coverage is largely local, although Moose Radio and More FM broadcast across most of the District, with the exception of Georgian Bay.

Cottage associations that cross muniCipal boundaries There are a number of associations with interests that cross municipal boundaries, including Lake of Bays Association, Muskoka Lakes Association, the Musl<oka Lakes Ratepayers Association, the Georgian Bay Association and the Severn Ratepayers Association.

Tourism associations The community of interest for tourism-related activities is both broad and narrow. At the District level, Muskoka is marketed as a single entity through the Muskoka Tourism Marketing Agency. Activities such as farmers' markets, although hosted locally, are District-wide for all practical purposes because many of the vendors travel between the various host communities. Advertising and the draw for such events goes beyond the District and attracts customers from further afield.

Summary of main points regarding communities of interest: For both the "formal" and "informal" communities of interest (that is, those services influenced by municipally provided facilities and those services driven by market decisions), Bracebridge and Huntsville are clearly dominant poles within the District, with Gravenhurst also representing a high level of identification. CommerCially, the trend appears to be towards of District-wide orientation, as evidenced by growing use of the Intemet, advertiSing and efforts to market the area to outside visitors as "Musl<okan

• There are also factors that influence a

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broader rather than narrower perspective. These include the catchment areas for the Catholic high schools, the extraordinary reach of the Bracebridge library service and indicators such as the large geographic focus of local heritage groups.

It is also clear from this analysis that the communities that comprise Georgian Bay tend to be somewhat less connected to the rest of the District than their counterparts. This is seen in the distribution areas of newspapers, retail trade areas, high school catchment areas, coastal based heritage interests, to name just some and reinforced by media such as cable and radio service. For services such as health and higher order retail requirements, for example, these same communities tend to be oriented north to Parry Sound and south to Midland and Orillia.

3.3 Evaluation The following table summarizes our approach, which was to compare each option against each criterion. Some criteria such as "lower taxes" were quantifiable, but most relied on "best judgement: Accordingly, for this initial evaluation we have not weighted the criteria. Each option was assessed out of a possible five points, with five being the highest rating.

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"7 /

At TERNATIVE GOVERNANCEAND SERVICE DELIVERY MODEL FOR MUSI<OI<A .. ' /'

~~ TABLE 9: SUMMARY OF EVALUATION

OPTION OPTION ,. ···OPTION • . <OPTION "ONE' . -,:wO"';,~ , "''1HREE:~~ ., "FOUR'--

"" _w • :'~'~':.' .

CRITERIA Status Single Northern Eastern COMMENTS Quo Municipality Musltol<a& Muskoka &

of Musltoka Southern Western Muskol<a Musltoka

1 Fewer politicians 1 5 4 4 #2&3 score high on community identify

2 Lower 1 5 4 2 #4 not fiscally sustainable taxes

3 a) More efficient service 1 5 4 2 #1 could achieve delivery improvements without

restructuring. #4 would not have sufficient critical mass in the west

3 b) Accessibility 5 3 4 2 The North/South option provides better accessibility than a sinale municioalitv

4 Less 1 5 3 3 #3&4 would need to bureaucracy duplicate "District"

functions

5 Better accountability 1 5 3 3 #3&4 would need to duplicate "District" functions

6 Fair representation for 3 4 4 3 Much depends on how all ratepayers ward boundaries are

decided. #2&3 need balance between rural and urban

7 Opportunity for public Process Process Process Process -discussion

8 Good watershed 4 5 3 1 #3&4 both reduce existing management area-wide management

capability

9 Boundaries later 2 4 4 1 #4 has less flexibility to adjust boundaries

Scare 19 41 33,· , .. ', .. 21·. ",

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4. SUMMARY OF CONCLUSIONS

4.1 Evaluation of the two most viable options As requested by the Ad Hoc Muskoka Restructuring Committee, we evaluated four options against the criteria established by the Province of Ontario and the Ad Hoc Muskol<a Restructuring Committee. This section summarizes our findings in that regard.

In our view, although the current two tier govemance model employed in Muskol<a has worked well, the events of the past few years that have seen a complete restructuring of roles and responsibilities between the Province and municipalities make it very unlikely that the status quo is a viable option. Furthermore, the option fared least well against the criteria selected by the Ad Hoc Muskoka Restructuring Committee. We do not suggest that this option merits further consideration.

Our review of Option Four (the creation of two single tier municipalities, divided into east and west), suggests strongly that, under the current assumption of the westerly municipality being comprised of only the Township of Georgian Bay, this option is not viable. This is because Georgian Bay has the lowest taxable assessment within the District, which, is our view, is insufficient to support adequate service delivery. As noted in this report, however, Georgian Bay is less associated with Muskoka as a whole when viewed from the perspective of communities of interest.

This finding does not preclude the possibility that Georgian Bay could at some time in the future be reconstituted with jurisdictions north and south of Georgian Bay to establish a long, narrow coastal municipality. Recent Provincial policy initiatives designed to protect the coastal areas of Georgian Bay may lead to new local government requirements for coastal municipalities. As the implication of those policies become clearer over the next several years, alternative design of Georgian Bay coastal rnunicipal governance may need to be considered.

There are really only two options that could provide a useful foundation for the redesign of local governance in Muskol<a. These are Option Two - creation of a new single tier municipality over the entire District and Option Three - creation of two single tier municipalities, divided into north and south with coordinating body(ies) at the level of Muskoka.

Throughout this process, the north/south option has received significant support from people who see Huntsville and Bracebridge and Gravenhurst as three distinctly different focal points of Muskoka. Our review of communities of interest confirms that these urban centres indeed play a key role in terms of defining activities driving life and business in Muskol<a. The urban clusters of central Muskoka are in many ways distinct. Huntsville, in particular is distinguishable from its southern neighbours in several indicators. All three areas are vital urban communities with a distinguishable character.

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These urban centres are also integrated in many ways. Their distinct characteristics are balanced by the interdependence of the Muskoka society and economy. Muskol<a Lakes Township, the population and assessment centre of Muskoka, relates extensively to all three centres. This study has an explicit criterion that all tax payers of Muskoka be treated fairly and equally. When Muskol<a is seen not just as the Highway 11 and 69 corridors but as an economic whole, an integrated pattern emerges. The centre of gravity of Muskoka in that analysis shifts towards Muskoka Lakes. That area is an integrating force of some significance. The urban facilities of all three Highway 11 towns are utilised by these residents and for many functions are interchangeable. The same is true to a lesser extent of the residents of the other rural areas of Musl<oka.

Other concerns raised by a north/south split reduce its attractiveness. First, if municipal operations and services in Muskoka were split on a north/south basis, it would be necessary to create special purpose bodies to provide watershed management, police, health, social services and other services currently being delivered District wide. At present, these amount to approximately 60 percent of the total tax levy. Whether directly or indirectly related to the municipal entity, special purpose bodies are less accountable. When the operations of such bodies are combined into a single service board for the sake of efficienCies, the resulting body starts to resemble an upper tier.

Service districts and special purpose bodies are problematic for effective local govemance. Governance is a process of setting priorities and allocating scarce resources to competing public goods. A municipal council, to effectively govern, must have the breadth of responsibility to allow it to choose among competing goods. If some of the choices are forced to a joint special purpose bodies, the capacity to govern is damaged. This is well illustrated by the dominance of "Quangos" (a British term for joint single purpose administrative bodies) at one point in recent British history. The dependence on boards and commissions for local government decisions left local councils with little authority other than collecting taxes to meet the cost of their share of these bodies. Dr. Henry Mayo, in his important study of Ottawa, composed a limericl< to illustrate the problem. Without endorsing the art form, its message is relevant for Muskoka:

The council/ors up at Pitlochry believed in the creed of ad hocery. They farmed all decisions to boards and commissions and made of their council a moc/(ery.

In summary, it is unwise to design a local government system where 60 percent of tax dollars will be allocated to joint bodies, only indirectly accountable to the municipal tax payer.

A second concern with creating two municipalities on a north/south basis is that the northerly municipality of Huntsville and Lake of Bays would have a much smaller population and taxable assessment than a southern Muskoka municipality. This would place the northerly municipality at a disadvantage when paying for services such as policing. Currently, the northern area consumes 40 percent of police activity and has 30 percent of the assessment to pay for it. Since policing is a significant and growing

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ALTERNATIVE GOVERNANCE AND SERVICE DELIVERY MODEL FOR MUSKOKA

expenditure item, the loss of access to the rich assessment of southern Muskoka should be a concern for the north.

Similarly a split of the north and south will make it more difficult for either municipality to cash flow costly infrastructure items such as the $10 million water treatment plant planned for Baysville. Capital items like this have been dealt with on a District wide basis and spread costs over the entire tax base. In the long run, the tax burden associated with capital initiatives will tend to equalise, but in the short term, it appears infrastructure project financing would unfairly shift costs onto a northern municipality.

Our conclusion with respect to Option Two - the single municipality of Musl(Qka - is that there are several reasons why this option merits further investigation by the Ad Hoc Muskoka Restructuring Committee.

The first is the opportunity to maintain and strengthen the benefrts of the current arrangement with respect to the boundaries of the District and the natural boundaries of the Muskol<a River Watershed. There is an extremely close fit between these boundaries (approximately 80 percent of Muskoka is within the Muskoka River Watershed) which has facilitated the development and continued use of a water quality model to monitor the cumulative impact of development at the District level. The waters of Muskol<a also play a I<ey role in the generation of hydro electric power, so the need for balanced decisions regarding water levels so as to satisfy diverse interests (habitat protection, recreational, power, to name just three) is all the more important.

Maintaining an appropriate balance between the environment and the economy is frequently held out as a key public policy objective. In Muskoka the motivation to maintain the attractiveness and environmental quality of Musl<oka's lakes and rivers is tied closely to the area's economic future as one of Ontario's major recreational and tourist destinations. A deputant at the recent public meeting in Port Sevem noted that although residents of the north may not appear to have much in common with those in the south, "anyone living downstream has a great deal of interest in what upstream neighbours do: The ability to maintain a unified voice on issues related to the watershed cannot be over emphasized.

The second is that, notwithstanding strong identification throughout Muskol<a with specific areas, there is a clear public perception that Muskoka is a place. This is demonstrated by the market place and by community interest groups and volunteer associations which have found it convenient to organize on an area wide basis. Economic development activities and the marketing of Muskol<a as a destination for tourists are also carried out on an area wide basis. These are significant responsibilities in today's highly competitive marketplace.

The third factor is that the single municipality option generates the most potential savings between $4 and $7 million, the best opportunity to avoid negative tax shifts, and provides for the potential to phase in any increases over a three year period. The calculation of potential savings has been undertaken in cooperation with the municipal treasurers. The methodology was to build the most cost effective budget possible for a single municipality and then compare that to the costs of dividing it in two. The

AlTERNATIVE GOVERNANCE AND SERVICE DELIVERY MODEL FOR MUSKOI<A

consultants have used the minimum savings figure throughout the study. If Muskol<a is determined to significantly reduce budgets, the higher target is achievable. If two municipalities are chosen, costs will be higher by about one million dollars, but otherwise the savings targets are just as attractive.

4.2 Comparison of the Two Most Feasible Options The chart below was requested at a recent public meeting and facilitates comparison between the two most feasible options. In the case of Option Three, the scoring that appears earlier in the report evaluates the north/south split as a concept. To facilitate comparison the scores on "Lower Taxes' have been modified to illustrate literally the potential effect of the north/south split.

TABLE 10:

Characteristic One Single lVlllllkcika i; -.:fI\ortileml1liuskcilali :"': " .Southem 'Musltoka >-" :". < '--::'::':<;:,;> ',l,' >c:!- -' ,~ - " .. .. ..

Population (all) 149438 44662 104 776 Area 423750 ha 146000 ha 277 750 ha Assessment ('000) 7,142,528 2130296 5012232 Assessment/Capita $47.8 $47.7 $47.8 Restructurina Savinas $4·$6 Million $1.()'1.5 Million $2.0·3.5 Million Special Purpose Bodies 1 - Health 3-4+ health, social services, watershed, possibly

• police economic development Councillors 12 + a mavor 6 + a mayor 8 + a mayor

'Rati~gp~5~ria:,c:,.~.;:i~-:;~i-~;;::: :;"";::~:::' .. Fewer Politicians 5 4 4 Lower Taxes 5 3 4 Services: a) Efficiency 5 4 4 bi Accessibility 3 4 4 Less bureaucracy 5 3 3 Better Accountability 5 3 3 Public opportunity nla nla nla Fair representation 4 4 4 Watershed 5 3 3 Boundary changes in phase 4 4 4 two . subjective

4.3 Transition issues

o Transition Planning - Costs of transition to a new governance system can be minimized with some forward planning. Identification of personnel leaving the system through regular attrition can lead to a pool of positions being maintained for the new

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ALTERNATIVE GOVERNANCE AND SERVICE DELIVERY MODEL FOR MUSKOKA I

organizations, without a high exit cost. These vacancies should not be filled until the new system is in place.

o Electoral Districts - For either option, it will be necessary and appropriate to design wards according to basic principles. If former municipal boundaries are used, the councillors for the first number of terms will tend to be parochial. Rather than having a councillor represent all of a former municipality, wards should be designed so more than one councillor represents parts of former municipalities. This is particularly important for the urban areas where parochialism is more prevalent. The Ad Hoc Musl<oka Restructuring Committee should establish principles for ward design. A group of municipal clerl<s should be commissioned to design the ward boundaries for the preferred model and submit them to the Province. Politicians and other interested parties may have input to this process but control should be left to the professional returning officers.

o New Organization Design. It should be clear to all staff that regardless of the model selected, no existing municipal administration will "take over". An entirely new administration that is derivative of all former systems will be established. None of the employees of the existing municipalities will have an inside track to pOSitions.

4.4 Conclusion As mandated by the Ad Hoc Muskoka Restructuring Committee, we have limited our role to first evaluating the options against the established criteria, and then assessing the relative merits of the two options thought to be most viable. In undertaking this exercise, we have not applied any weighting to the importance of one criterion over another.

We conclude that Options Two and Three both have the potential to be developed as a viable model of governance for Musl<oka. Each has its strengths and weaknesses. It is our view, however, that Option Two (the single municipality of Muskoka) has the most merit, particularly from the point of view of managing the watershed and from a financial perspective. If the Ad Hoc Musl<oka Restructuring Committee were to assign the criterion of accessibility a higher weighting, it is equally possible that Option Three (north/south split) could be made to worle

Respectfully submitted,

Canadian Urban Institute

CANADIAN URBAN INSTITUTE ~I

t==.J

ALTERNATIVE GOVERNANCE AND SERVICE DELIVERY MODEL FDR MUSKOKA

#1 The existing District of Musltolta (Options 1 & 2)

#2 North/South Split Option 3

#3 East/West Split Option 4

#4 Musltoka River watershed

#5 Selected school catchment areas

#6 Selected library catchment areas

#7 Principal retail trade areas

#8 Newspaper circulation

#9 Chambers of Commerce

#10 Environmental, heritage and cottage associations crossing municipal boundaries

#11 Radio, cable and Internet service

CANADIAN URBAN INSTITUTE

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At TERNATIVE GOVERNANCE AND SERVICE DEUVERY MODEL FOR MUSKOAA

APPENDIX 1. T el'ms Of Reference

CANADIAN URBAN INSTITUTE

OBJECTIVE:

BACKGROUND:

MEMBERSHIP:

AD HOC MUSKOKA RESTRUCTURING COMMITTEE

TERMS OF REFERENCE

October, 1999

To recommend to the Province an alternative governance and service delivery model for Muskoka having regard for the following criteria:

o Lower taxes, enhanced and improved services, reduction of the number of Municipal politicians, less bureaucracy, clear lines of responsibility and better accountability.

o Discussions will include, but are not limited to, the sharing of information and resources to develop a recommended option for Local Government respecting the above criteria within the geographic boundaries of Muskoka, without precluding possible adjustments to existing District boundaries around Muskoka which could maximize the operational, administrative and representational efficiencies of the District.

o The environment.

ADMINISTRATIVE PROCEDUlRES

The establishment of the Committee has been discussed by each of the respective Councils.

The Muskoka Ad Hoc Restructuring Committee (the "Committee") is comprised of seven Members (the "Members") and includes the six Mayors of Muskoka and the Chair of the District Municipality of Muskoka, or voting deSignate in their absence, as follows:

o District Municipality of Muskoka, Chair Gord Adams o Town of Bracebridge, Mayor Scott Northmore o Town of Gravenhurst, Mayor Bob Betts o Town of Huntsville, Mayor Len Oarke o Township of Lake of Bays, Mayor Tom Pinckard o Township of Georgian Bay Mayor Mike Kennedy o Township of Muskol(Cl Lal<es, Mayor John Young

TERM:

CHAIR:

VICE-CHAIR:

QUORUM:

VOTING:

SUB-COMMITTEES:

MEETINGS:

AGENDAS:

-2-

Each Member shall serve on the Committee for the current term of elected office or until the Committee is disbanded or completes its work, whichever first occurs.

The Committee shall appoint a Chair. The Chair shall consent to the nomination and be elected by a simple majority vote of the Members.

The Committee shall appoint a Vice-Chair. The Vice-Chair shall consent to the nomination and be elected by a simple majority vote of the Members. The Vice-Chair shall assume the role of Chair in his absence or upon the request of the Chair.

A quorum shall consist of four (4) Members in attendance at the meeting.

All Members shall cast a vote. The outcome will be based on a simple majority. In the instance of a tie vote, the motion will be lost. Other Members of Municipal Councils (the "Councillors") and the public may attend meetings of the Committee as observers and their attendance will be recorded.

The Committee may establish one or more Sub-Committees.

Meetings shall be held at the Call of the Chair and the location of meetings shall rotate on a meeting by meeting basis. Meetings shall be held at the Municipal Office, unless due notice of a change in location is provided. The conduct of meetings of the Committee and any Sub-Committee shall be pursuant to the proviSions of the Municipal Act, R.s.o. 1990, Chapter MA5, as amended.

The Chair shall issue an agenda to all members with a copy forwarded to the Clerk of each Municipality for distribution to other Councillors (and all staff). The agenda shall be released at least five (5) working days prior to the date of the meeting. "Other Business" shall only consist of items of information or of an urgent nature. Unless approved by a majority of Members in attendance, matters of "Other Business" which require discussion will be brought forward to the next agenda.

MINUTES:

BUDGET:

ACCOUNTABILITY:

STAFF & OTHER RESOURCES:

LEGISLATION:

On a rotational basis, the Members shall provide a Recording Secretary for the meeting. The Recording Secretary will compile minutes of the meeting which summarize the discussions, and denote any recommendations and any action required. Minutes shall be forwarded within five (5) business days to each Member and to the Clerk of each Municipality to be forwarded to all Councillors and staff.

There has been $35,000.00 assigned to the budget of the Committee made up of $5,000.00 from each municipality. Additional required funding, if any, shall be obtained through resolutions of each Council on a cost sharing basis.

Deferred to be reconsidered at a subsequent meeting.

Each member of the Committee shall arrange for respective staff to attend all meetings on an advisory basis so as to provide information, respond to enquiries and undertake any follow-up about a specific matter. Their attendance will be recorded in the minutes. Staff shall not have a vote.

The conduct of the Committee and its Members shall be governed by the same legislation as that which governs Councils. Of particular note are the Municipal Act, the Municipal Conflict of Interest Act, and the Municipal Freedom of Information and Protection of Privacy Act.

Ai TERNATlIIE GOVERNANCE AND SERVICE DELIVERY MODEL FOR MUSKOKA

APPENDIX 2. list of individuals and organizations that submitted comments

!September 199~

Cross, Doug Dymond, Jack Kingshott, June

pctober 1999;

Baker, Don Wypich, John

November 199~

Cross, Doug District of Muskoka Musl<oka Lakes Association Rae, Doug & Sandra

!December 1999:

Anonymous

ALTERNATIVE GOVERNANCE AND SERVICE DELIVERY MODEL FOR MUSKOKA

Bal<er, Don - Huntsville Ratepayers' Association Carswell, Jessica Muskoka Liaison Committee Muskol<a Lakes Association Lake of Bays Association Georgian Bay Association Township of Muskoka Lakes Ratepayers' Association Thorpe, Christopher Township of Georgian Bay

Qanuary 200g

Anonymous Batten, Don Birnbaum, John, Georgian Bay Association Black, Russ - Bracebridge Ratepayers' Association Clarke, Bill Cole, Michael Cooper, Lois Green, Roberta Hatch, H.C. - Lal<e of Bays Association Houle, Harvey Northey, Patrick, Georgian Bay Littoral Biosphere Reserve

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ALlERNATIVE GOVERNANCE AND SERVICE DELIVERY MODEL FOR MUSI(OKA

Northmore, Scott - Town of Bracebridge Spear, Julian Tappin, Nigel

February 20001

Albrough, Ken Baker, Don - Huntsville Ratepayers' Association Best, June Best, Stephen and Lorraine Best, William Birnbaum, John Birnbaum - Georgian Bay Association Black, Russ Bolt, Roger Chandler, June Clayson, Paul Crombie, Guy Eady, Don & Barbara Failey, Scott - Muskoka Liaison Committee Goldring, Carolyn - Huntsville/Lake of Bays Chamber of Commerce Henry, Ron Hilditch, Fred - Gibson Lake Cottagers' Association Holland, Hugh Kingshott, June McCormick, Don McDonald, James Miglin, Sven Nicholls, Russell- Huntsville Lal<e of Bays Railway Society Schreiber, Rudolf Snell, Gordon Stimers, Bruce Stimers and John Brenciaglia - Peninsula Lake Association Swain, Jayson Tapley, Brian Turl, Terry and Sue Van Der Kraan, Jan - Ad Hoc Committee of Public Libraries Welch, Pat - Friends of Huntsville Public Library Wyndowe, Jeffrey Wyndowe, Jeffrey - Honey Harbour Association

CANADIAN URBAN INSTITUTE "I