On Monday, December 4th the RM of Torch River #488 held a special council meeting to discuss the municipality’s Capital Plan budget and 2018 Operating Budget.
All current councilors were present, Division 2 Councilor, Carissa Schmidt, Division 3 Councilor, Peter Lubyk, Division 6 Councilor, Tom Jensen with Division 1 Councilor, David LaRose, chairing the meeting. RM Superintendent Murray Black and Administrator Nathalie Hipkins were also present.
The meeting was the early stage of the Draft Budget planning for 2018 and reviewing and revising as necessary the long term plan, into 2019 and 2020, though no decisions where made at this meeting and any topics to be voted on where deferred to be addressed at a regular council meeting.
Traditionally, the council appoints a Financial Planning Committee, comprised of the administrator, the Reeve and at least one councilor, whose mandate is to develop a 5- year policy on a construction, maintenance, capital and financial plan; review the plan and update it each year; assist in the budgeting process each year; make recommendations to the council.
However, Administrator Hipkins indicated in an email “..that council wanted to wait to appoint committee members until newly elected officials hold office, they decided to not have a financial committee meeting and rather discuss the budget as a whole.”
Important note: The projects, purchases, expenses and revenues discussed as part of this meeting are not final amounts. Review of the draft budget is an ongoing process and the new Reeve and councilors for Divisions 4 and 5 will have the opportunity for input after the upcoming January election. This article is not all inclusive and only highlights topics covered in the meeting.
EMPLOYEE WAGES
The meeting began by addressing the standard annual employee pay scales where three options were reviewed. After careful review of the options it was decided to bring it forward to make the decision at a regular council meeting. Options recommended by the Administrator included increases of 1%, 2% as well as a third option with a 2% increase and select minor adjustments made to account for a few positions in the transportation department she explained were falling behind when compared to standard rates elsewhere for those positions.
CAPITAL PLAN
Capital Plan was addressed next which covers major projects, ongoing projects and capital purchases. Administrator Hipkins explained some of the overall Capital planning concepts emphasizing that, in the past, the operations and capital projects have been reactive and the shift needs to focus on preventive maintenance. The plan proposed establishes phase-in for major projects including a plan to maintain roads, a plan to maintain bridges as well as a plan to replace damaged culverts.
Among the Capital projects listed in the draft plan were PDAP Culvert repairs, Recap the Love and Choiceland Grids, Torch River Forest Road, and Stripping Gravel pits. Long term projects included building up the Correction Line Road in 2020. Work that would be ongoing annually such as pulling shoulders, a process that recovers gravel that has been pushed towards the ditches off the road bed and builds proper shoulders to ensure adequate drainage. Administrator Hipkins asked Superintendent Black if a plan was in place defining which roads would be priority each year for pulling shoulders, to which he responded that they were, “..going to try to do the worst ones”.
One of the largest expenditures ongoing is the repair of the south of Garrick bridge, which work has begun in 2017 and will continue on into 2018. PDAP, (Provincial Disaster Assistance Program) is available to cover part of the costs, however no figures of estimated costs nor PDAP contributions were available, though Administrator Hipkins estimated a potential cost of $400,000.
CAPITAL PURCHASES
The majority of the capital purchases proposed where submitted by the Superintendent, Murray Black, including the purchase of a newer semi and a new bully dump gravel trailer. Superintendent Black explained to the council that his plan was to purchase the semi and gravel trailer and have RM employees do all of the RM’s gravel hauling, and eliminate the practice of contracting out the work. He indicated he felt this would save the RM money and “not have to wait”. Figures from the 2017 accounts indicated the RM spent approximately $116,000 in tenders to contractors in the past year. In his proposed budget, Superintendent Black estimated the semi would cost the RM approximately $80,000 and a new belly dump gravel trailer would be around $50,000. No figures where provided as to what the cost to the RM would be in increased staff wages, fuel, maintenance or other additional costs of RM staff doing the work of the current contractors.
In addition to the semi purchase, Superintendent Black also included in his portion of the proposed budget, purchase of a Cat crawler for $120,000, and estimates for new fuel tanks at $6,000, a culvert trailer at $8,000, and a Secan for storage at $8,000 and a mower tractor that needs replacing for $60,000. The amount for the Secan was lowered to $5,000 after councilors Jensen and Schmidt pointed out the cost estimate was too high.
Carrying on with the Superintendent Black’s move to reduce tendering out contracts, the potential purchase of a skid-steer was proposed for 2019, though the amount allotted of $10,000 was too low according to at least two of the council members, citing a potential cost of at least $20,000 and up to $40,000. Superintendent Black again explained that acquisition of the additional crawler and skid-steer would aid in reducing the number and cost of contracts tendered out.
In November 2017, the RM had already paid out $453,094.18 for contracts including road repairs for the year to date. The purchase of a new culvert trailer had actually already been budgeted for in 2017 but no purchase was made. Smaller purchases included in the Transportation budget included minor amount to purchase necessary shop tools, as well as $5,000 for a new impact wrench and $1,500 to purchase a 5 ton floor jack.
As part of the existing 5 year revolving plan, the budget allows for a new grader with plans to trade in the John Deere grader, a practice exercised every year by the RM. The 5 year plan works around warranty coverage and greatly reduces the cost of repairs and maintenance while ensuring reduced down time for the entire fleet of graders. In addition, the capital cost is budgeted into the reserves so that no financing costs need to be added to the expense each year.
Office related Capital purchases proposed where limited, though a recommendation was brought forward by Administrator Hipkins to consider the purchase and subscription to an asset management system, Assetfinda. While the recent installation of the GPS systems has provided valuable information showing work as it has been done by such as road grading and snow plowing, Assetfinda is an asset management is a system that combines software and a portal, for tracking extensively more information than the GPS provides. The system purchase and installation would cost approximately $27,500, and would include costs of installation on all RM devices and training for RM staff. Once installed the annual subscription would cost approximately $12,000 per year.
Administrator Hipkins explained that, with the impending requirement for all municipalities to create and implement an Asset Management Plan, she had been exploring different options to collect and analyze the data necessary to base the AMP on. Basic data that needs to be prepared, such as calculating road maintenance costs per kilometer of road or estimating life spans of roads based on different maintenance scenarios.
The program also works as a work order system, enabling more efficient assignment of tasks to staff, includes a mapping program which would be more efficient that the existing GPS mapping. In addition to the ability to save time preparing implementing the Asset Management Plan, Administrator Hipkins also explained that quick and easy access to data and costs will enable the RM staff to provide information on costs when requested by ratepayers. The system works in real time so RM staff in the field can enter and view information at the time work is performed. Council members agreed that it would be worth investigating further and Administrator Hipkins suggested having the Assetfinda Representative make a presentation to the council.
Federation of Canadian Municipalities’ Municipal Asset Management Program (MAMP) provides funding for projects that will help Canadian cities and communities of all sizes enhance their asset management practices. The goal of the program is to help municipalities make informed investment decisions for infrastructure assets, such as roads, buildings, water supply and sanitation systems, in order to deliver value for money while best serving citizens’ needs. Funding for up to 80 per cent of total eligible project costs, to a maximum of $50,000 can be applied for.
LANDFILL
Environmental regulations are a major concern for the RM Landfill. A environmental assessment report was viewed which indicated a major investment was going to be required to continue to operate the landfill and meet current environmental standards. While no estimates of what those costs would be were available, Councilor Jensen suggested the RM look into comparing the costs of continuing operating the landfill versus the cost of joining in with other municipalities in the joint landfill operated near Nipawin and shutting down the RM of Torch River Landfill.
Councilor Lubyk suggested they also look into the option of purchasing an incinerator, an option which, when combined with composting and recycling could be a viable alternative. One other option available would be turning the existing landfill into a transfer station, however none of the council members felt that would be a suitable option to consider.
20 Year Bridge Plan
The last 20 year bridge plan was developed in 2010, with many of the bridge repairs being done with MREP (Municipal Roads for the Economy Program) grants. With MREP cutbacks, no money for bridges has been received in 2017 and while 2018 applications have been made, Administrator Hipkins indicated that 2015 and 2016 applications are still ongoing.
The Municipal Roads for the Economy Program (MREP) provides funding assistance with annual funding provided by the Ministry of Highways and Infrastructure. There are three components of the MREP: Clearing the Path (CTP) Corridor Incremental Maintenance, Heavy Haul-High Volume Road and CTP Construction Projects, and Municipal Bridge Services. A Program Management Board (PMB) with representation from SARM and the Ministry of Highways and Infrastructure is responsible for overseeing the MREP program. Funding is allocated to projects that score the highest points when projects are ranked. The program does allow for substitutions.
Other areas of concern for Council and Administrator
Many basic annual costs were reviewed in the proposed budget, with few changes from the 2017 budget. Some costs projected higher than normal included printing costs due to new maps coming out and training costs anticipated to be higher than normal with both the current need to fill three vacant council positions as well as the upcoming October 2018 election for councilors in Divisions 2, 4 and 6.
Some of the expenses and revenues covered in the budget included areas that caused some concern for various members of council and the administrator.
- Councilor Jensen noted that, though a small amount for cemetery maintenance had been included in the 2018 draft, he felt it was council’s policy not to do cemetery or custom work. While he believed the council had agreed to reimburse for grass cutting on a one time basis at two cemeteries in the Garrick area, he was concerned a precedent should not be set or “we will be stuck doing all the cemeteries”. Cemeteries in the RM are normally maintained by volunteer groups.
- Administrator Hipkins pointed out that there weren’t reserves being set aside for building maintenance and upkeep, indicating she felt reserves should reflect unexpected up keep costs.
- Councilor Schmidt expressed concern about contractors going over budget and felt the issue needed to be discussed further, suggesting that contractors be paid only the amount they tendered and if they made errors on tenders and did not account for all their expenses that it should not be the responsibility of the RM to pay in excess of the tendered amount.
- Councilor Jensen express concern that the figure provided by Superintendent Black of 1,700 kilometers of RM roads having been plowed, was excessive and felt that what roads are being plowed and maintained need to be reviewed and felt there was a possibility the kilometers of roads done could be reduced. Superintendent Black also indicated he felt that less gravel could be used following the suggestion made by Councilor Jensen.
- Administrator Hipkins also noted that the current EMO reserves may be very low. Should a wildfire originate in the RM, Ministry of Environment holds the RM responsible and can bill for their costs. As an example she indicated that MOE had accidentally billed the RM for the 2015 Torch River Fire, in the amount of $300,000. That error was corrected as the fire in question was deemed to have started in the forest. The current reserve of $39,000 for Emergency Management would not cover costs if a wildfire originates in the RM in the future.
- Councilor Jensen also indicated he felt RM budget amounts for Recreation and Culture should also be reviewed
The meeting was adjourned at 12:30 pm.
The next regular meeting of the RM of Torch River Council is set for Friday, December 8th at 9:00 am in the council chambers in White Fox, SK.
