Lac Ste. Anne County has completed an initial review of the financial position of the Town of Mayerthorpe to determine a course of action in the wake of stalled Intermunicipal Collaboration Framework (ICF) negotiations with the Town.
The financial review consists of a high-level assessment of publicly-available data, and looks at indicators like expenditure practices and overall financial sustainability compared to benchmarked municipalities with reasonably comparable populations.
Consistent with the measures taken by the County in its own planning and budgeting approach, County Council intends to explore similar opportunities for operational efficiencies, programming changes and ownership models to support sustainable governance of the Town of Mayerthorpe.
Following two years of good faith negotiations, ICF talks ultimately broke down due to the Town of Mayerthorpe’s precondition of additional financial support from County ratepayers (the Town was the only municipality that attached a financial stipulation to its ICF negotiations). As mandated by the Municipal Government Act, the County has successfully completed ICF agreements with every adjacent municipality, with the sole exception of the Town of Mayerthorpe.
Lac Ste. Anne County Council cautions that the Town’s demand for a steep and incrementally climbing increase in recreation funding would place an unreasonable financial burden on the County and its citizens. During a period of unprecedented and unrelenting financial strain, the County simply cannot support an increase of taxes on ratepayers in order to compensate for the unaddressed financial management issues of another municipality.
“The longer the County continues to prop the Town of Mayerthorpe up, the longer these inefficiencies will continue to occur,” stated Lac Ste. Anne County Reeve Joe Blakeman. “We are weighing our options on this matter, because everything the Town has put forward to date amounts to a ‘Mayerthorpe Surcharge’ that would hurt all ratepayers of this region — on an ongoing and incrementally rising basis. I strongly encourage everyone who pays taxes in Mayerthorpe as well as Lac Ste. Anne County to sit up and take notice of what is happening here. Visit mayerthorpesurcharge.ca and look at the numbers yourselves, because any shortfalls will be coming from your pockets if the Town gets its way.”
It is the County’s position that the Town of Mayerthorpe’s rate of escalation in recreation spending is unsustainable. Overall recreation spending was 2.75 times greater in 2019 than 2014. Over that six-year period, total inflation was 8.53%, and the Town of Mayerthorpe’s population has consistently declined.
Spending Raises Questions About Town’s Sustainability
While recreation spending was the catalyst for the failed ICF negotiations, the County’s review of the Town of Mayerthorpe’s financial reporting related to recreation led to further scrutiny of all operating expenses and revenues — and subsequently the financial position of the Town.
In addition to unreasonably high expenditures on recreation, the financial review indicates a financial position that is adversely impacted by unreasonably high expenditures on salaries, wages, and benefits relative to benchmarked municipalities with comparable populations.
“It is evident that Mayerthorpe is out of both money and ideas,” continued Reeve Blakeman. “First they sought to balance their books by digging into our coffers. Then they tried (and nearly succeeded) to increase their own ratepayers’ taxes by a whopping 15%. Now they seek to drag us through an arbitration process that is all but certain to shake the County down to some degree. These are not the actions of a fiscally sound, sustainable local government.”
County Questions Spirit of Arbitration; Explores Alternatives
In a February 26, 2021 media release, Town of Mayerthorpe Mayor Janet Jabush stated that the Town and County have no other options except a costly arbitration process. It should be noted that the cost burden to which Mayor Jabush refers to would be almost entirely borne by Lac Ste. Anne County ratepayers. *
While arbitration may be a desirable and relatively risk-free option for the Town of Mayerthorpe, Lac Ste. Anne County Council is in the process of exploring other alternatives to this costly and structurally biased approach; up to and including amalgamation of the Town.
“By triggering binding arbitration, Mayerthorpe knows they will get to have their cake and eat it too,” continued Reeve Blakeman. “Sadly, the system is designed to support such behaviour. Of course Mayerthorpe favours the arbitration process, because they know it means they are all but guaranteed to receive some sort of favourable judgment. Municipal Affairs also supports arbitration because it allows them to check a box and file this matter away. But let’s be clear: neither of these parties care whether the average Lac Ste. Anne County ratepayer gets the short end of the stick.”
Despite the Town of Mayerthorpe’s apparent eagerness to embark upon what Town Mayor Jabush described as an ‘expensive arbitration process,’ it is incumbent upon Town administrators to explain what they seek to arbitrate to begin with. Further, any meaningful arbitration proceedings would need to be conducted by an individual who is both qualified to arbitrate such a matter, and who is free from conflict and bias.
Reeve Blakeman posited: “You tell us what the issue is, and we’ll tell you if we think that’s what the issue is. And then we can discuss who to choose to arbitrate the matter — on the County’s dime. Regarding payment of the considerable legal and administrative fees that come with arbitration, perhaps we could earmark some of the $200,000.00 we give the Town each year.”
In the absence of a substantive description of the Town of Mayerthorpe’s arbitration position, Lac Ste. Anne County Council will continue to explore opportunities for operational efficiencies, programming changes, and ownership models that will support sustainable operations and programming for Mayerthorpe residents.
For more details on this evolving matter, please visit LSAC.ca/icf.
* If the Town of Mayerthorpe forces Lac Ste. Anne County into binding arbitration, County ratepayers will be legally responsible for covering 95.09% of all related arbitration costs — in addition to payment of any judgment awarded to the Town.